Financial Data and Key Metrics Changes - Precision Drilling reported adjusted EBITDA of $126 million for Q4 2025, compared to $121 million in Q4 2024, reflecting a year-over-year increase [4] - The company recorded a net loss of $42 million in Q4 2025, which included non-cash charges of $67 million for decommissioning drilling rigs and $17 million for drill pipe, while net income would have been positive $42 million without these charges [5] - The net debt to adjusted EBITDA ratio improved to 1.2 times, with a reduction in debt by CAD 101 million during the year [2][13] Business Line Data and Key Metrics Changes - In Canada, drilling activity averaged 66 active rigs, an increase of 1 rig from Q4 2024, with daily operating margins reported at CAD 14,132, down from CAD 14,559 in Q4 2024 [5] - In the U.S., the average active rig count was 37, an increase of three rigs from the prior year, with daily operating margins of $8,754, slightly up from $8,700 in Q3 2025 [6] - The CMP segment reported adjusted EBITDA of CAD 17 million, up from CAD 16 million in the prior year, driven by increased well servicing demand in Canada [8] Market Data and Key Metrics Changes - Internationally, Precision averaged seven active rigs, down from eight in the prior year, with international day rates averaging $53,505, an 8% increase from the previous year [6][7] - The Canadian market outlook remains solid, supported by commodity prices and increased LNG and crude takeaway capacity, while the U.S. market is expected to remain flat with pockets of growth [20] Company Strategy and Development Direction - The company aims to drive revenue growth and deepen customer relationships, focusing on performance and efficiency to differentiate itself in the market [15][19] - Precision is investing in rig upgrades and digital technologies to enhance operational performance and customer service [18] - The company is exploring international growth opportunities, including a memorandum of understanding (MOU) in Argentina to provide idle rigs and digital technology [21][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Canadian market's medium to long-term outlook, despite short-term volatility due to weather and commodity prices [20] - The U.S. market is expected to remain flat, but there are opportunities for modest growth driven by performance differentiation [20] - The company plans to continue its focus on financial discipline and shareholder returns, with a target to increase free cash flow allocated to shareholders up to 50% [12][60] Other Important Information - Capital expenditures for 2025 were CAD 263 million, with CAD 156 million for sustaining and infrastructure and CAD 107 million for upgrades [9] - The company expects to incur $2 million in one-time charges related to rig reactivations in Q1 2026 [10] Q&A Session Summary Question: Context around the rig demobilization in Kuwait - Precision has six rigs in Kuwait, with four active and two idle, looking for opportunities to reactivate the idle rigs [25][26] Question: Potential upside in the U.S. rig count - Management indicated that growth opportunities in the U.S. are driven by performance and efficiency, with active discussions in multiple basins [31][32] Question: Guidance on U.S. margins for Q1 - The guidance for U.S. margins is $8,000-$9,000 per day, with mixed pricing trends across operating segments [38][39] Question: Details on the MOU in Argentina - The MOU aims to explore opportunities in Argentina with an established partner, focusing on performance and technology [42][43] Question: Impact of customer changes on Canadian demand - Management noted no significant change in demand despite individual customer adjustments, with strong activity levels in the Canadian market [50][51] Question: Rig upgrade capital allocation - A portion of the $63 million earmarked for upgrades is committed, with opportunities identified in Canada and the U.S. [62][64]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported net income of approximately $32 million, or $0.23 per diluted share, on revenues of approximately $708 million, compared to net income of approximately $15.5 million, or $0.11 per diluted share, on revenues of approximately $608 million in Q4 2024 [18] - Adjusted EBITDA for Q4 2025 was approximately $126 million, up from approximately $108 million in Q4 2024 [19] - For the full year 2025, net income attributable to GEO operations was approximately $254 million, or $1.82 per diluted share, on revenues of approximately $2.63 billion, compared to $32 million, or $0.22 per diluted share, on revenues of $2.42 billion in 2024 [23] Business Line Data and Key Metrics Changes - Owned and leased secure service revenues increased by approximately $70 million, or 23%, in Q4 2025 compared to Q4 2024, primarily driven by the activation of new company-owned facilities [19] - Managed-only contracts revenues increased by approximately $26 million, or 17%, driven by the joint venture agreement for the North Florida Detention Facility [20] - Revenues for electronic monitoring and supervision services increased by approximately 3% from the prior year's fourth quarter, reflecting a favorable technology and case management mix shift [21] Market Data and Key Metrics Changes - The census across active ICE facilities increased from approximately 22,000 in Q3 to approximately 24,000, the highest level of ICE populations recorded [5] - The current ICE detention census is approximately 70,000, distributed over 225 separate locations, primarily short-term jail facilities [10] - The company has approximately 6,000 idle beds at six company-owned facilities, which could generate over $300 million in annualized revenues at full capacity [11] Company Strategy and Development Direction - The company has been awarded new or expanded contracts representing approximately $520 million in new incremental annualized revenues, marking the largest amount of new business won in a single year in its history [3] - The company is exploring opportunities in the field of mental health services and is participating in a procurement for the management contract at a state forensic psychiatric hospital [15] - The company is cautiously participating in the federal government's procurement process for retrofitting commercial warehouses to increase detention capacity [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential of the ICE contract, particularly with the increase in more intensive monitoring devices and case management services [8] - The company expects 2026 to be as active as 2025, with upside potential across diversified business segments [33] - Management noted that the federal government is focused on increasing immigration detention capacity and is looking for solutions to upscale to 100,000 beds or more [11] Other Important Information - The company completed the sale of the Lawton, Oklahoma facility for $312 million and the Hector Garza facility for $10 million, resulting in a $232 million pre-tax gain on asset sales [24] - The company initiated a share repurchase program in August 2025, expanding it to $500 million in November, with approximately 5 million shares repurchased for approximately $91 million by year-end 2025 [16] - The company closed 2025 with approximately $70 million in cash and approximately $1.65 billion in total debt [28] Q&A Session Summary Question: Regarding ICE's focus on warehouse initiatives and contract delays - Management indicated that ICE is pursuing both warehouse initiatives and utilizing existing private sector bed capacity, estimating a need for at least 20,000 new beds to reach a target of 100,000 [42][44] Question: On ISAP contract participation levels - Management confirmed that they are prepared to scale up monitoring devices and case management services to meet increased participation levels as requested by ICE [46] Question: Stock buyback strategy given low stock price - Management acknowledged the opportunity to be more aggressive with stock buybacks at current levels and emphasized their commitment to managing liquidity while taking advantage of the buyback program [47][48] Question: Monitoring service margins and mix shift - Management explained that margin compression is primarily due to a mix shift towards higher-cost ankle monitors and increased case management services [52][53] Question: Guidance for fiscal 2026 and startup expenses - Management stated that they are incorporating startup expenses related to the activation of idle facilities into their guidance, which is designed to be prudent and balanced [68][69]

Financial Data and Key Metrics Changes - TELUS achieved record free cash flow of CAD 2.2 billion for the full year 2025, representing an increase of 11% over 2024, exceeding the annual target [8] - The company reported a T-Tech adjusted EBITDA increase of 3.1% for 2025, demonstrating disciplined execution and a focus on cost efficiency [8][24] - The net debt to EBITDA leverage ratio improved to 3.4 times at the end of 2025, with expectations to reach approximately 3.3 times or lower by the end of 2026 [20][28] Business Line Data and Key Metrics Changes - In the fourth quarter, TELUS achieved total telecom customer net additions of 377,000, with wireless driving strong net additions of 337,000 [9] - The company reported 1.1 million full mobile and fixed customer net additions in 2025, including record connected device net additions of 716,000 [5][6] - TELUS Health experienced a 13% increase in operating revenues and a 10% increase in adjusted EBITDA, attributed to the acquisition of Workplace Options and organic growth [26] Market Data and Key Metrics Changes - TELUS maintained an industry-leading postpaid mobile phone churn rate of 0.97% for the full year 2025, marking the twelfth consecutive year below the 1% threshold [7] - The company reported a decline in ARPU of 1.6%, but noted an accelerated sequential improvement, reflecting effective go-to-market strategies [24][25] Company Strategy and Development Direction - TELUS is focused on amplifying profitable revenue expansion while maintaining cost efficiencies, positioning itself for sustainable value-accretive growth [21] - The company plans to leverage its AI capabilities to drive down costs and improve operational efficiencies, targeting CAD 150 million to CAD 200 million in annual cash synergies [16][94] - TELUS aims to grow its AI-enabling capabilities revenue from approximately CAD 800 million in 2025 to around CAD 2 billion by 2028 [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering sustained profitable growth, supported by a robust asset mix and diversified business portfolio [30] - The company anticipates consolidated service revenue and adjusted EBITDA growth of up to 4% in 2026, alongside a free cash flow target of approximately CAD 2.45 billion [20][29] - Management emphasized the importance of maintaining healthy industry economics and brand differentiation amidst competitive pressures [36][84] Other Important Information - The company announced a leadership transition, with Victor Dodig set to become CEO effective July 1, 2026, following Darren's retirement [3][4] - TELUS is exploring strategic investment opportunities for TELUS Health and TELUS Agriculture and Consumer Goods, alongside monetization of real estate and copper assets [19][20] Q&A Session Summary Question: Current wireless environment and strategy on flanker vs. fighter brands - Management acknowledged the promotional environment and emphasized the importance of brand differentiation to maintain healthy industry economics [36] Question: Improvement in ARPU trend - Management confirmed that the improvement in ARPU is organic and expected to continue, driven by better customer value propositions [64] Question: Guidance for revenue and EBITDA growth - Management indicated that growth will come from telecom, TELUS Digital, and TELUS Health, with expectations of double-digit EBITDA growth from both digital and health segments [51] Question: Changes in CEO and potential impact on capital allocation - Management assured continuity in growth initiatives and capital allocation strategies despite the leadership transition [68]

Financial Data and Key Metrics Changes - In Q4 2025, adjusted EBITDA was $285 million, a 4% year-over-year increase driven by higher gathering and compression volumes [5] - Free cash flow after dividends for Q4 was $85 million, contributing to a leverage reduction to 2.7x and approximately $48 million in share repurchases [5] - For the full year 2025, free cash flow after dividends reached a record $325 million, a 30% increase compared to 2024 [5] Business Line Data and Key Metrics Changes - The acquisition of HG Midstream for $1.1 billion adds over 400 undeveloped locations in the Marcellus Shale, enhancing Antero Midstream's competitive position [3] - The company expects 8% year-over-year EBITDA growth and 11% year-over-year free cash flow growth in 2026, driven by the integration of the acquired assets [4][7] Market Data and Key Metrics Changes - The company anticipates generating over $1.2 billion in adjusted EBITDA for 2026, reflecting an 8% increase year-over-year [7] - The capital budget for 2026 is set between $190 million and $220 million, focusing on well connections, water capital, and compression asset integration [6] Company Strategy and Development Direction - Antero Midstream's strategy emphasizes capital-efficient organic growth and the integration of acquired assets to enhance free cash flow [3][8] - The company aims to maintain a strong balance sheet with leverage in the low 3x range while executing a balanced return of capital program [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued EBITDA growth and capital efficiency, projecting high single-digit growth beyond 2027 [12] - The integration of the water system and the development program is expected to provide significant growth visibility [4] Other Important Information - The company achieved a 20% return on invested capital (ROIC) in 2025, indicating strong capital efficiency [5] - The acquisition is fully financed, allowing for value accretion to existing shareholders without the need for equity financing [8] Q&A Session Summary Question: Long-term growth outlook post-acquisition - Management indicated that the 3 rig, 2 crew program will support continued growth beyond 2027, with expected throughput volume growth of about 200 million a day [12] Question: Growth plans for Antero Resources (AR) and implications for Antero Midstream (AM) - Management noted that AM's capital requirements remain minimal due to existing infrastructure, while AR is well-positioned to meet growing demand over the next 5-10 years [15][16]

Financial Data and Key Metrics Changes - The company reported Q4 AFFO per share of $0.45, with full year AFFO at $1.78 per share, representing a 2.9% growth over 2024 [22] - Q4 cash rental income was $67.5 million, reflecting an 11.1% growth compared to the previous year [23] - Annualized cash-based rent at quarter end was $264.2 million, with a weighted average five-year annual cash rent escalator of 1.5% [23] Business Line Data and Key Metrics Changes - In Q4, the company acquired 30 properties for $95 million at a blended cap rate of 7%, marking a 20 basis point expansion over the previous quarter [12] - Total investment volume for 2025 increased by 20% from 2024, with 53 unique transactions completed [13] - The company maintained a portfolio occupancy rate of 99.6%, with 95% of leases expiring in 2025 remaining occupied [24] Market Data and Key Metrics Changes - The company sidestepped major tenant credit issues, reporting zero bad debt expense in 2020 and 2025 [6] - Rent coverage in Q4 was 5.1x for the majority of the portfolio, among the strongest in the net lease industry [6] - The company has diversified its rent sources, with 37% coming from outside casual dining, including automotive service (13%), quick service restaurants (11%), and medical retail (10%) [9] Company Strategy and Development Direction - The company focuses on acquiring high-quality real estate occupied by creditworthy tenants, avoiding problematic retail sectors [5][9] - The strategy includes expanding into new retail categories such as grocery and equipment rental, while maintaining a cautious approach to acquisitions [10][15] - The company aims to leverage its strong balance sheet and low leverage to capitalize on acquisition opportunities in 2026 [11][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current market, citing a favorable debt capital environment and ample liquidity [19][20] - The company anticipates continued growth in 2026, supported by a strong pipeline of acquisition opportunities and a disciplined capital allocation strategy [17][76] - Management highlighted the importance of maintaining a balanced approach to real estate and credit, avoiding sectors with high risk [46] Other Important Information - The company has no debt maturities until December 2026, with a focus on managing minor upcoming maturities [21] - The company reported a significant gap between its implied cap rate and the blended cap rate of recently sold net lease properties, indicating potential undervaluation [25] Q&A Session Summary Question: Can you discuss the market for United Rentals and industrial outdoor storage? - Management noted the attractiveness of the sector, highlighting the large addressable market and the potential for creditworthy tenants [28] Question: What is the status of the Bahama Breeze locations? - Management confirmed that several locations will be converted to other Darden brands, with strong interest from potential new tenants [32][38] Question: How does the company manage its balance sheet and leverage? - Management emphasized a disciplined approach to capital allocation, with a focus on maintaining low leverage while pursuing accretive acquisitions [41] Question: What is the company's exposure to Red Lobster? - Management indicated that Red Lobster is performing better under new ownership, with stores predominantly under a master lease [45] Question: Are there any sectors the company is avoiding? - Management reiterated its focus on balanced real estate and credit, avoiding sectors that have not proven resilient through cycles [46]

Financial Data and Key Metrics Changes - Adjusted earnings for the full year were $38.8 million or $0.95 per share, while for the fourth quarter, they were $11.6 million or $0.28 per share [11] - The company achieved EBITDAR of $27 million for the quarter and $95 million for the year [13] - Cash breakeven was reported at $11,700 per day, or $10,800 per day excluding CapEx [10][23] Business Line Data and Key Metrics Changes - MR tankers earned $25,300 per day in Q4 and $29,100 per day in Q1 2026, with 50% booked [10] - Chemical tankers earned $19,900 per day in Q4 and $20,800 per day in Q1 2026, with 30% booked [10] - The company maintained a strong spot market exposure of 82% while layering in high-quality time charters [11][29] Market Data and Key Metrics Changes - The company noted a significant increase in voyage lengths due to geopolitical disruptions, particularly with the ban on Russian diesel and changes in trade routes [15][16] - The aging MR fleet is approaching scrapping, which is expected to benefit younger vessels like Ardmore's [18][19] - The global tanker fleet is experiencing tightening supply due to sanctions, with about 30% operating outside mainstream trades [14][16] Company Strategy and Development Direction - Ardmore's strategy focuses on capturing opportunities in refined oil products and complex chemical cargoes, leveraging a fully integrated trading platform [21] - The company emphasizes innovation and performance, with ongoing investments in efficiency upgrades and AI-driven voyage optimization tools [21][24] - Ardmore aims to maintain best-in-class corporate governance and a disciplined capital allocation policy [25][38] Management's Comments on Operating Environment and Future Outlook - Management highlighted favorable underlying market conditions and a robust earnings environment, with TCE performance reflecting continued strength [9] - The geopolitical landscape is reshaping trade flows, reinforcing the importance of flexibility in commercial approaches [55] - The company is committed to maintaining financial flexibility to navigate uncertainty and capitalize on opportunities [55] Other Important Information - Ardmore completed a major dry docking cycle, enhancing fleet performance and reducing future CapEx significantly [11][26] - The company has a strong focus on corporate governance, being recognized as the top-ranked tanker company in governance scorecards [38] Q&A Session Questions and Answers Question: Future capital allocation considering rising asset values - Management indicated a non-binary approach to capital allocation, balancing between growth and maintaining a strong fleet [60] Question: Thoughts on the newbuilding market for MRs - Management has not participated in the newbuilding market since 2013, finding better value in the second-hand market [63] Question: Clarification on AI returns - AI investments are focused on adoption rather than development, ensuring guaranteed returns with minimal CapEx [67]

Financial Data and Key Metrics Changes - In 2025, the company achieved record levels of gross written premium and adjusted net income, with gross written premium increasing by 32% and adjusted net income rising by 62% to $216 million, exceeding initial guidance of $180 million-$192 million [4][31] - The adjusted return on equity for the full year was 26%, with an adjusted combined ratio of 72.7%, an improvement from 73.7% in 2024 [30][31] - For Q4 2025, adjusted net income was $61.1 million, or $2.24 per share, representing a 48% increase from Q4 2024 [23][24] Business Line Data and Key Metrics Changes - The earthquake franchise saw a 2% decline year-over-year, attributed to a one-time headwind from a large unearned premium transfer in Q4 2024, while the residential earthquake book performed well with a premium retention rate of 97% [8][9] - The Inland Marine and other property group grew by 30% year-over-year, driven by strong performance in admitted and E&S Builders Risk products [10] - The casualty business experienced a 120% year-over-year growth in gross written premium, ending 2025 at 20% of total gross written premium [13][14] Market Data and Key Metrics Changes - The commercial earthquake book faced a 15% rate decrease due to elevated competition, while the residential earthquake book continued to grow, expected to achieve high single digits to double digits growth [9][48] - The crop franchise generated $248 million in gross written premium, exceeding expectations, with a projected growth of over 30% in 2026 [16][17] Company Strategy and Development Direction - The company executed four strategic imperatives in 2025: integrate and operate, build new market leaders, remember preferences, and generate consistent earnings [5] - For 2026, the company aims to leverage scale for profitable growth, curate a distinct portfolio, deepen market positions, and integrate AI for operational efficiency [21][22] - The acquisition of Gray Surety is expected to strengthen the surety franchise and provide diversification to the earnings base [19][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth momentum, with 2026 adjusted net income guidance set at $260 million-$275 million, implying a 24% growth [20][32] - The company anticipates modest premium growth and margin expansion in the earthquake book despite ongoing commercial pressure [10][49] - Management remains conservative in managing casualty exposure and reserves, with a focus on maintaining balance sheet strength [15] Other Important Information - The company reported a net investment income of $16 million for Q4 2025, a 41.3% increase year-over-year, driven by higher yields on invested assets [28][29] - The company plans to reconstitute product groups, with fronting no longer being a standalone category, and will report on five product categories going forward [18][35] Q&A Session Summary Question: Higher retention on crop and its contribution to earnings - Management indicated that retaining more in crop could add approximately $8 million of pre-tax income for every $100 million retained, with a combined ratio expected in the low 90s [38] Question: 10% reduction in reinsurance costs - The reduction is on a risk-adjusted basis, assuming like-for-like exposure [39] Question: Growth expectations from new underwriting hires - Management noted that growth contributions from new hires depend on the market they enter, with a focus on moderate growth and strong reinsurance support [42][44] Question: Breakdown of earthquake growth - The residential earthquake book is expected to grow while the commercial book faces pressure, with management anticipating high single digits to double digits growth for residential [48] Question: Loss ratio expectations - Management expects the loss ratio to be in the mid- to upper 30s for 2026, influenced by increased retention in crop and growth in that segment [50][54] Question: Capital deployment opportunities - Management indicated a focus on organic growth, increased retention, and opportunistic share buybacks, with a balanced approach to capital allocation [71][73]

Financial Data and Key Metrics Changes - In Q4 2025, adjusted EBITDA was $285 million, a 4% year-over-year increase driven by higher gathering and compression volumes [5] - Free cash flow after dividends for Q4 was $85 million, contributing to a leverage reduction to 2.7x and approximately $48 million in share repurchases [5] - For the full year 2025, free cash flow after dividends reached a record $325 million, a 30% increase compared to 2024 [5] Business Line Data and Key Metrics Changes - The acquisition of HG Midstream for $1.1 billion adds over 400 undeveloped locations, enhancing Antero Midstream's competitive position in the Marcellus Shale [3] - The company expects 8% year-over-year EBITDA growth and 11% year-over-year free cash flow growth in 2026 [4][7] Market Data and Key Metrics Changes - The capital budget for 2026 is set between $190 million and $220 million, focusing on well connections, water capital, and compression asset integration [6] - The forecast for 2026 includes adjusted EBITDA of over $1.2 billion, reflecting an 8% increase year-over-year [7] Company Strategy and Development Direction - The company emphasizes a just-in-time capital investment strategy that generates consistent free cash flow [3] - The integration of the acquired water system and investment in dry gas assets are expected to provide high visibility into growth [4] - The strategy includes a balanced return of capital program through debt reduction and share repurchases [8] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued growth beyond 2027, with mid- to high single-digit EBITDA growth expected [12] - The company is well-positioned to meet growing demand over the next 5-10 years due to its strategic location and infrastructure [16] Other Important Information - The company achieved a 20% return on invested capital (ROIC) in 2025 [5] - The acquisition is fully financed, allowing for value accretion to existing shareholders without equity financing [8] Q&A Session Summary Question: Long-term growth outlook post-acquisition - Management indicated that the 3-rig, 2-rig program will support continued growth beyond 2027, with expected throughput volume growth of about 200 million a day [12] Question: Growth plans for Antero Resources (AR) and implications for Antero Midstream (AM) - Management noted that there is minimal additional capital required for AM due to existing infrastructure, and AR is well-positioned to meet growing demand with firm transport options [14][16]

Financial Data and Key Metrics Changes - In 2025, the company achieved record levels of gross written premium and adjusted net income, with gross written premium increasing by 32% and adjusted net income rising by 62% to $216 million, exceeding initial guidance of $180 million-$192 million [4][31] - The adjusted return on equity for the full year was 26%, with an adjusted combined ratio of 72.7%, compared to 73.7% in 2024 [30][31] - For Q4 2025, adjusted net income was $61.1 million, or $2.24 per share, representing a 48% increase from Q4 2024 [23][24] Business Line Data and Key Metrics Changes - The earthquake franchise saw a 2% decline year-over-year, attributed to a one-time headwind from a large unearned premium transfer in Q4 2024, while the residential earthquake book grew, maintaining a premium retention rate of 97% [8][9] - The Inland Marine and other property group grew by 30% year-over-year, driven by strong performance in admitted and E&S Builders Risk products [10] - The casualty business experienced a 120% year-over-year growth in gross written premium, ending 2025 at 20% of total gross written premium [13][14] Market Data and Key Metrics Changes - The commercial earthquake book faced a 15% rate decrease due to elevated competition, while the residential earthquake book showed strong retention and new business growth [9][10] - The crop franchise generated $248 million in gross written premium, exceeding expectations, with a projected growth of over 30% in 2026 [16][17] Company Strategy and Development Direction - The company executed four strategic imperatives in 2025: integrate and operate, build new market leaders, remember preferences, and generate consistent earnings [5][6] - For 2026, the company aims to leverage scale for profitable growth, curate a distinct portfolio, deepen market positions, and integrate AI for operational efficiency [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth and profitability, with a 2026 adjusted net income guidance of $260 million-$275 million, implying a 24% growth [20][32] - The company anticipates modest premium growth and margin expansion in the earthquake book despite ongoing commercial pressure [10][49] Other Important Information - The company closed the acquisition of Gray Surety, which is expected to strengthen its surety franchise and contribute to long-term growth [19][34] - The company plans to reconstitute product groups, with fronting no longer being a standalone category [18] Q&A Session Summary Question: Higher retention on crop and its contribution to earnings - Management indicated that retaining more in crop could add approximately $8 million of pre-tax income for every $100 million retained, with a combined ratio expected in the low 90s [38] Question: 10% reduction in reinsurance costs - The reduction is on a risk-adjusted basis, assuming like-for-like exposure [39] Question: New hires and their expected contribution to growth - Management noted that new hires are expected to contribute to growth, but the impact will depend on the market conditions they enter [42][43] Question: Breakdown of earthquake growth - The residential earthquake book is expected to grow in the high single digits to double digits, offsetting pressure in the commercial segment [48][49] Question: Loss ratio expectations - Management expects the loss ratio to be in the mid- to upper 30s for 2026, influenced by the growth in the crop business [50][52] Question: Capital deployment opportunities - Management indicated a focus on organic growth, increased retention, and opportunistic M&A, with share buybacks also being considered [69][70]

Financial Data and Key Metrics Changes - The company reported Q4 AFFO per share of $0.45, with full-year AFFO at $1.78 per share, reflecting a 2.9% growth over 2024 [22] - Q4 cash rental income was $67.5 million, representing an 11.1% growth compared to the same quarter last year [23] - Annualized cash-based rent at quarter end was $264.2 million, with a weighted average five-year annual cash rent escalator of 1.5% [23] Business Line Data and Key Metrics Changes - In Q4, the company acquired 30 properties for $95 million at a blended cap rate of 7%, marking a 20 basis point expansion over the previous quarter [12] - For the full year 2025, the company acquired 105 properties for $318 million at a blended cap rate of 6.8% [12][13] - The company maintained a strong portfolio occupancy rate of 99.6%, with 95% of leases expiring in 2025 remaining occupied [24] Market Data and Key Metrics Changes - The company has diversified its tenant base, with 37% of rents coming from sectors outside casual dining, including automotive service (13%), quick service restaurants (11%), and medical retail (10%) [9] - The company sidestepped major tenant credit issues, reporting 0 bad debt expense in 2020 and 2025 [5] Company Strategy and Development Direction - The company focuses on acquiring high-quality real estate occupied by creditworthy tenants, emphasizing a conservative capital allocation strategy [3][4] - The company is expanding into new sectors such as grocery and equipment rental, while maintaining a cautious approach to ensure alignment with existing underwriting criteria [15][16] - The company aims to leverage its strong balance sheet and low leverage to capitalize on acquisition opportunities in 2026 [11][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the quality of their real estate and the ability to re-tenant properties, particularly in light of recent tenant brand changes [8] - The company anticipates a strong year in 2026, supported by favorable debt capital markets and a robust pipeline of acquisition opportunities [11][76] Other Important Information - The company has no debt maturities until December 2026, providing a stable financial outlook [21] - The company reported a cash G&A expense of $18 million for the year, at the bottom of its guidance range [23] Q&A Session Summary Question: Can you discuss the market for United Rentals and industrial outdoor storage? - Management noted that the sector is attractive due to the value in land residuals and the presence of creditworthy tenants, with a large addressable market [28] Question: What is the status of the Bahama Breeze properties? - Management confirmed that several properties will be converted to other Darden brands, with high interest from potential new tenants for the remaining locations [32][38] Question: How does the company view its leverage strategy? - Management indicated that they are disciplined in capital allocation and have ample liquidity for acquisitions without approaching their leverage ceiling [50] Question: What is the company's exposure to Red Lobster? - Management stated that Red Lobster is performing better under new ownership, with stores predominantly under a master lease affirmed at the same rent [45] Question: What is the company's approach to diversification? - Management emphasized a balanced approach, avoiding sectors that have not proven resilient through cycles, while focusing on high-quality, creditworthy tenants [46]